re: Response to Mr. Bellfy // Alice Dreger

​This is a response to Council Member Ruth Beier’s post this morning to Public Response.

Before responding to that, please note that East Lansing Info (ELi) provides sourcing (with links and PDFs) for all of its reporting on Phil Bellfy’s lawsuit against the City and City Attorney under the federal False Claims Act, so you can check our reporting for links to things like the settlement agreement, the City Manager’s request for a waiver from the federal conflict of interest rules, and HUD’s determination letter requiring the City to return the misused funds. If there is anything you want to see and can’t find, use the “contact us” link at our website and we will supply what we have.

Council Member Beier writes, “This was the city’s error. People make mistakes, and the city owns this one.” We reported that, and also that the city “owning this one” means that the cost of the project has shifted from mostly federal taxpayers entirely to local taxpayers. City Council could elect to ask the City Attorneys to help pay the bill, but it has not done so.

As we reported most recently, the great majority of property owners in East Lansing are required to pay for the sidewalks and retaining walls adjoining their properties – indeed, all are required to do so by law if the Council so orders it. In most cases, Council orders property owners to pay to repair parts or all of retaining walls and sidewalks adjoining their properties. In this case, the property owners were never asked to pay anything.

In his plea to HUD following the settlement agreement, City Manager George Lahanas said that the City Attorneys could not have afforded to pay for this project, which perhaps explains why the City did not ask them to pitch in. Mr. Lahanas also told HUD that this $150,000 project did not increase the value of the properties, and that this was an appropriate use of funds meant to support the needs of low- and moderate-income people because such people might walk on the sidewalk.

In response, HUD determined this was a misuse of CDBG funds, and that the City failed to disclose the conflict of interest of the City Attorney, as required by law.

Council Member Beier writes, “The problem with Mr. Bellfy’s accusation and the reporting by ELi is that both imply that the City Attorney was colluding with the city to get a retaining wall for free.” We’ve reported Mr. Bellfy’s contention, but I don’t see anywhere that we have implied this, and in fact we reproduced the City’s responses to Mr. Bellfy’s claims to provide both sides’ views.

We have reported that City Attorney Tom Yeadon was on both ends of the easement agreements for the retaining wall – he was a property owner and was simultaneously functioning as attorney for the City, on the other side of the legal agreement – and that he did not disclose that in writing, as required by the Michigan Rules for Professional Conduct.

In fact, when I was reporting on this conflict of interest failure in 2012, Mr. Yeadon demanded a retraction and threatened to sue me. (I did not retract; he did not sue.) Maybe Mr. Yeadon didn’t know about statewide and federal conflict of interest rules, meant to prevent corruption. As our City Attorney, one would hope he would, and one would think he would advise his client – the City – to make sure everyone, including him, follows the rules, including when the issue came to the fore in 2012.

Mr. Yeadon had “no idea that this project was being funded with a federal grant since CDBG grants do not go through the City Attorney’s office,” according to Council Member Beier. Well, he at least became aware of the details in 2012, when his lack of formal conflict of interest disclosure became a source of open controversy and he started to threaten to sue me.

Council Member Beier says, “Mr. Bellfy and ELi downplay the fact that along Abbot road, property owners gave up valuable property so that the sidewalk could be widened to improve pedestrian safety.” For this to be true, the couple of feet given up for the widened sidewalk and retaining wall would have to have been worth more than the property gained in value from the $150,000 improvement. It is difficult to believe that that thin strip of land along a busy road was worth more than was gained in value, but I guess we could look to see if the City Assessor devalued the City Attorney’s property after the taxpayer-funded improvement.

Many East Lansing property owners would probably happily deed thin strips of land over to the City if it meant they didn’t have to pay for expensive repairs. We have asked Mr. Lahanas how property owners can ask to get a similar deal – several ELi readers asked us to find out. He has not responded.

Council Member Beier writes, “Another example of trading property rights for sidewalk/retaining walls is the Saginaw Street pathway project.” On July 16, I asked the City for documentation on this case so that we can sort out who got what in that case, and compare it to the Abbot Road case, but the City has yet to fulfill that request. (The Director of Public Works is out of town.) We will report it when we get it.

We stand by all of our reporting in this case, and if we find that there is a factual error in what we have reported, we will make a correction.

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